WPP has begun its expected programme of disposals in the wake of Sir Martin Sorrell’s departure, with its stakes in Buenos Aires-based software business Globant and digital ad exchange AppNexus first on the block. American Telecoms giant AT&T is to bid $1.6bn for AppNexus, creating a third force in big digital exchanges behind Google and Facebook.
Brian Lesser, former head of WPP’s Xaxis digital operation, joined AT&T as head of its new advertising and analytics business last year.
More will doubtless follow as WPP tries to reduce its £5.2bn debt pile. Another likely candidate is its stake in Vice Media and the big one its research operation Kantar which is said to be worth £3.5bn, although it’s not clear who will pay this.
Under Sorrell WPP began to look more like a media company than an advertising business and most of his investments in the sector appear to have paid off. But WPP lacks the money to compete with the much larger Google and Facebook (and now AT&T) and WPP’s new joint COOs Mark Read and Andrew Scott seem intent on retracing the company’s steps to a client-focussed business.
They’d better get a move on. According to the Times six per cent of the company’s shares – about £1bn worth – are out on loan to short sellers, meaning that hedge funds and the like are betting they will fall.
